Motilal Oswal Financial Services has maintained a 'Neutral' rating on Eicher Motors Ltd. following the company's Q4 FY26 results, as reported by NDTV Profit. The brokerage has assigned a target price of ₹6,912 on the stock, implying a potential downside of 1% from current levels. The rating reflects the company's sustained margin pressure despite healthy demand momentum across the Royal Enfield business.
According to the Motilal Oswal report, the brokerage projects Royal Enfield to record a 13.5% volume CAGR over FY26-28E. The domestic business is expected to deliver a 14% CAGR, while exports are likely to post a much slower 9% CAGR, with growth largely back-ended. This projection reflects the company's strategic focus on volume expansion across both domestic and international markets.
As reported by NDTV Profit, given management's focus on volume growth and the recent upsurge in input costs, Motilal Oswal expects margins to remain under pressure. The brokerage anticipates that the combination of aggressive volume targets and rising input costs will continue to impact profitability margins in the near term, despite the positive volume growth trajectory.
According to the Motilal Oswal analysis, the brokerage expects Eicher Motors to post a 14% earnings CAGR. At 31.6x/27.6x FY27E/FY28E, the stock appears fairly valued based on current market conditions and growth projections. The valuation methodology includes valuing Royal Enfield at 28x FY28E EPS and VE Commercial Vehicle at 12x EV/EBITDA.
